Prime Doesn’t Submit Teaming Agreement, Loses Evaluation Credit

A prime contractor submitting a proposal for a design-build project was not entitled to take advantage of the experience of its designer because the prime failed to submit a teaming agreement between itself and the designer.

In a recent bid protest decision, the GAO held that the agency properly viewed the designer as a subcontractor, and acted reasonably–under the specific terms of the solicitation–in refusing to award experience credit for the designer’s work because the prime did not submit a teaming agreement.

The GAO’s decision in G4S-SJC, LLC, B-409694, B-409694.2 (July 14, 2014) involved a NAVFAC design-build solicitation.  The solicitation called for award to be made to the lowest-priced, technically acceptable offeror.  In determining technical acceptability, NAVFAC was to consider the recent and relevant experience of the constructor and the designer.

The solicitation stated that if the offeror was submitting as a joint venture, the offeror was required to provide NAVFAC with a copy of its joint venture agreement.  Similarly, the solicitation stated that in order for a subcontractor’s experience to be evaluated, the offeror was required to submit a copy of the teaming agreement between itself and its subcontractor.

G4S-SJC, LLC submitted a proposal.  G4S proposed another entity (which was unnamed in the GAO’s protest decision) to serve as the designer.  However, G4S did not submit a joint venture agreement or subcontract agreement between itself and its designer.

In its evaluation of G4S’s proposal, NAVFAC identified an organizational chart showing the designer in a subordinate position to Gs4’s management.  NAVFAC concluded that the designer was a subcontractor.  Because no teaming agreement had been submitted, NAVFAC refused to consider the designer’s experience, and eliminated G4S from the competitive range.

G4S filed a GAO bid protest, contending that the agency’s evaluation was unreasonable.  G4S argued that its designer was not a subcontractor, and therefore, G4S had not been required to submit a teaming agreement between itself and its designer.

The GAO wrote that G4S’s argument was “untenable.”  It noted that under the solicitation, the design “could be performed in-house by the prime contractor, by a joint venture partner, or by a subcontractor.”  G4S’s designer was not the prime contractor (G4s), nor was it a joint venture partner.

Therefore, especially in light of the organizational chart, it was not unreasonable for NAVFAC to conclude that if the designer “was not the offeror or a joint venture partner, it must have been a subcontractor.”  The GAO denied G4S’s protest, holding that NAVFAC reasonably refused to consider the designer’s experience because no teaming agreement had been submitted.

Although I do not have statistics, my perception is that procuring agencies are increasingly requiring prime offerors to submit copies of joint venture agreements and teaming agreements.  When a solicitation requires the submission of such agreements, it is imperative that prime offerors understand the legal relationships between itself and its teammates, and respond to the agency accordingly.

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